Which of the following is true of the cash payback period?

A) the longer the payback, the longer the estimated life of the asset
B) the longer the payback, the sooner the cash spent on the investment is recovered
C) the shorter the payback, the less likely the possibility of obsolescence
D) All of these choices

The cash payback period is the length of time it takes for the cash inflows from an investment to recoup the initial investment. A shorter payback period means that the investment will recoup its initial cost quicker, and therefore, there is less risk of the investment becoming obsolete before its costs have been recovered. Option A is incorrect because a longer payback period could mean that the asset has a longer estimated life, but it is not necessarily true. Option B is incorrect because a longer payback period means that it takes longer to recover the initial investment, not the opposite.